A NATION CHALLENGED: THE ASSETS

A NATION CHALLENGED: THE ASSETS; U.S. FREEZES MORE ACCOUNTS; SAUDI AND PAKISTANI ASSETS CITED FOR TIES TO BIN LADEN

By JOSEPH KAHN with JUDITH MILLER

Published: October 13, 2001

WASHINGTON, Oct. 12—
The Bush administration vowed today to seize the assets of more individuals it says support terrorism, including a prominent businessman from Saudi Arabia, a United States ally whose reluctance to move against people and groups with ties to Osama bin Laden has become a politically sensitive issue.

The new list of 39 individuals and groups, which adds to 27 identified in a White House executive order last month, appears for the first time to draw a direct link between Mr. bin Laden and prominent members of Saudi society.

It names Yasin al-Qadi, a Saudi businessman who has run a foundation with trustees that have included some of the kingdom's most prominent families. It has funneled millions of dollars from Saudi businesses to Mr. bin Laden, according to the Treasury Department.

Although the administration consulted with European allies before proceeding with the latest names, it did not alert Saudi Arabia ahead of time, one official said.

The list was released as Saudi Arabia is trying to walk a fine line between its alliance with the United States and its commitment to a stark interpretation of Islam espoused by many radical opponents of America. [Page B3.]

Also on the list is Rabita Trust, a Pakistani charity that at least until recently had Pakistan's president, Gen. Pervez Musharraf, on its board. Administration officials said they warned President Musharraf of the impending order against the Rabita Trust and encouraged him to disassociate himself from what they described as its founder's links to Al Qaeda, Mr. bin Laden's terrorist network.

The new list puts increased pressure on both Pakistan and Saudi Arabia, two countries whose help the United States has solicited in its war against terrorism, to move against some of their own citizens and financial institutions.

Until now, the administration's strategy in attacking the finances of terrorism has been to ''pick the lower hanging fruit in the beginning,'' according to one official. Today's list, however, ups the ante by naming individuals and groups tied to countries considered vital in the alliance against terrorism.

President Bush and administration officials have gone out of their way to praise the Saudis for their cooperation in recent days. But some administration officials say they feel the Saudis have moved slowly to scrutinize Islamic charities, some of which are suspected of being misused by Mr. bin Laden.

The Saudis have told the United States that they have searched for assets belonging to people on the first list but were unable to locate any, American officials said, adding that they doubted the search had been deep or thorough. Officials also complained that Saudi Arabia has yet to formally instruct its banks to expeditiously seize such assets if they are found.

A spokesman for the Saudi Embassy declined to comment on any of its citizens suspected of terrorist links, citing a continuing investigation.

Treasury Department officials say they will use enhanced powers to block any money or property connected to the suspected terrorists or their supporters and will also pressure foreign banks to do likewise or risk losing their own assets in the United States. Administration officials said today that 66 other nations have frozen accounts on the suspect list generated by the United States, and that 110 others have pledged to move in that direction.

The government has sought to thwart terrorist financing by requiring banks and financial institutions to scrutinize their accounts for any links to suspected terrorists and their associates. Any money, securities or property discovered is impounded until the government -- or a court -- allows it to be released.

Under today's order any assets belonging to someone on the list, such as a bank account, are to be frozen by the institution where they reside. Moreover, people and organizations are barred from doing any further business with those named.

Officials say that they have seized about $24 million in assets linked to suspected terrorists since Sept. 11, not including hundreds of millions of dollars tied to the Taliban ruling party in Afghanistan, some of that impounded well before the latest terrorist strikes.

''We took the next step in the financial war,'' Treasury Secretary Paul H. O'Neill said today. He said the administration has ''spurred the entire world to act with unprecedented speed and cooperation to disrupt the financial underpinnings of terrorism.''

The administration has a much broader list of Saudi-linked organizations under scrutiny, including several large Islamic charities thought to wittingly or unwittingly donate money to Al Qaeda. So far, the Treasury Department has not moved formally to freeze the assets of those groups, pending further investigation.

Diplomatic considerations have also prevented the administration from broadening its financial dragnet to include other terrorist groups. Despite pressure from some prominent Republicans and supporters of Israel, the Bush administration did not name Hamas and Hezbollah, two Israeli-focused groups, for example.